Sal Rehmetullah is the founder and CEO of Worth, a technology company focused on building the next generation business credit score.
Small businesses are the backbone of the global economy, driving innovation, creating jobs and building communities. But for many small-business owners, navigating the financial world can be overwhelming. Financial institutions have a tremendous opportunity to step in and offer solutions tailored to these businesses’ unique needs. The challenge? Earning the trust and loyalty of small-business owners in a crowded market.
I decided to put together five key strategies and how to actually do them to help financial institutions win more business from small businesses—and keep them coming back for more.
1. Create a consumer-like experience.
Small-business owners are also consumers, and they’ve grown used to seamless, intuitive digital experiences in their personal lives. From one-click shopping to instant payments, these interactions shape their expectations of financial services. Banks and financial institutions need to bring that same simplicity and personalization into their offerings for small businesses.
How To Achieve This
• Streamline interfaces. Use modern tools to simplify complex banking workflows and unify loan applications, account management and payment solutions in one user-friendly platform. For example, Santander Bank saw a 40% reduction in loan processing time after implementing nCino—making life easier for their team and customers.
• Offer omnichannel support. Whether it’s through an app, live chat or in-person meetings, give small business owners options for how they engage with their financial institutions. Platforms like Salesforce Financial Services Cloud help banks deliver consistent experiences across all channels, boosting satisfaction and loyalty.
The impact is simple: Small-business owners want efficiency, and if your platform feels outdated or cumbersome, you risk losing customers to competitors.
2. Embrace the power of AI.
Artificial intelligence (AI) isn’t just a buzzword—it’s transforming how financial institutions serve small businesses. AI can help banks deliver personalized advice, speed up processes and reduce costs. For small business owners, AI-driven solutions can make navigating their finances less stressful and more insightful.
How To Use AI Effectively
• Utilize smarter lending. AI platforms like Upstart go beyond traditional credit scores by evaluating broader data sets like cash flow or online reviews. Taking this approach can enable faster loan approvals and smarter risk management.
• Offer proactive financial insights. For example, Kabbage by American Express uses AI to provide small businesses with real-time financial data, helping them anticipate cash flow challenges and avoid surprises.
• Provide fraud protection. Solutions like FICO Falcon Fraud Manager leverage machine learning to detect fraud in real time, giving small-business owners peace of mind.
Implementing these strategies can help adopters reduce operational costs, allowing them to reinvest in better services for customers.
3. Design onboarding for specific industries.
A coffee shop and a tech startup have vastly different needs, but traditional onboarding processes often treat them the same. Tailoring the onboarding experience to specific industries can help small-business owners feel understood and valued immediately.
Best Practices
• Leverage vertical-specific workflows. Retail businesses might prioritize tools that integrate with POS systems, while a healthcare provider might need extra focus on compliance. Platforms like Plaid can help financial institutions create onboarding experiences tailored to different industries.
• Simplify paperwork. Providing pre-filled forms and automation can go a long way in reducing friction. PayPal, for example, adjusts its onboarding for merchants based on their industry, providing tailored integration for platforms like Shopify.
Personalized, industry-specific onboarding can encourage SMBs to stay beyond the critical first 90 days of a position, ultimately reducing churn.
4. Leverage data to understand small businesses.
Banks often have access to rich data about their small-business customers—but are they using it effectively? Having the right data can make a huge difference in understanding and anticipating SMB needs.
How To Use Data Wisely
• Create a 360-degree customer view. Lean on tools that provide detailed insights into a business’ financial health, growth potential and spending habits that allow banks to deliver more relevant products and services.
• Stay up-to-date. Look into solutions like Enigma that offer real-time data on SMBs, ensuring financial institutions can act on the most accurate information available.
Banks using advanced SMB analytics have the opportunity to see higher loan approval rates and better repayment outcomes. It’s clear that better data leads to better results—for both the bank and the customer.
5. Be transparent every step of the way.
Transparency builds trust, and trust is the foundation of any strong business relationship. Yet, many SMBs feel financial institutions aren’t clear enough about fees, loan terms or approval processes.
How To Build Trust
• Simplify pricing. Small-business owners value predictable costs. Consider offering flat-rate payment processing with no hidden fees. Square is a great example of taking this approach.
• Provide real-time updates. Make sure to keep customers informed about the status of their loan applications or other transactions, leveraging automation tools where possible to reduce uncertainty and frustration.
• Use clear language. Financial jargon can alienate customers. Simplify your terms and conditions to make SMBs feel more confident in their decisions.
The Bottom Line
Winning over small businesses isn’t just about offering products—it’s about understanding their challenges and solving them in a personalized, transparent and easy way. If your processes feel opaque, you’re likely losing business to competitors who prioritize clarity.
Financial institutions can set themselves apart from the competition by delivering a consumer-like experience, leveraging AI, creating tailored onboarding, utilizing rich data and fostering transparency. The banks and fintechs that embrace these strategies aren’t just earning customers—they’re building partnerships. And as small businesses thrive, so do the financial institutions that support them.
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